Principal residence status if moving back to Canada

[lilylam]

I have been thinking hard about moving back to Canada next year. Today I have another question coming into my mind. If we all move back as a family, obviously the rental property will be our principal residence. But the situation is a little bit unusual. Due to the employment contract issues, the spouse can only join us in Canada in two years. If the spouse is the non-resident, can we still claim the property as whole principal residence or half principal residence? It is a joint ownership. Thanks.

[nelsona]

This of course would only apply wehen you sell, but the rule is that one cannot claim any principal residence in Canada when they are non-residsnt of canada, which your spouse will remain until she moves.

One thing you will have to deal with when YOU move is the change of use rules. Have you CCA'd the property?

[lilylam]

I claimed CCA in rental and I am preparing to pay the capital gains tax. It is fair and I have no problem with it.
If the property is neither an investment property nor a principal residence after half of the family moved in, I am just curious to know what status of this property when we eventually sell it?

[nelsona]

It is YOUR principal residence. it is your spouse's 'cottage'. When you sell, there will be a calculation to make to determine the portion of gain from now to sale that your spouse would have to pay gains on (you won't have to, once you take care of the change of use tax).

[lilylam]

Good to know this. Thank you so much.